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PDM Royalties Income Fund Announced Amended Terms to its Previously Announced Acquisition and Corresponding Financing

MONCTON, NEW BRUNSWICK--(CCNMatthews - Nov. 7, 2006) -

NOT FOR DISTRIBUTION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES

PDM Royalties Income Fund (the "Fund") (TSX:PDM.UN) announced today that, in light of the recent statements from the federal Minister of Finance respecting the taxation of income trusts and the ensuing impact to the capital markets, it is proposing to amend certain terms of the previously-announced acquisition of Baton Rouge Restaurants and the corresponding financing. Mikes Restaurants Inc. ("Mikes"), a wholly-owned subsidiary of Pizza Delight Corporation Ltd. ("PDC"), will amend its formal agreement with 3066316 Nova Scotia Company and Baton Rouge Restaurants Company (collectively "Baton Rouge") and the shareholders of Baton Rouge, pursuant to which it will acquire all of the assets of Baton Rouge for approximately $43.0 million ("Asset Purchase"), representing a $1.0 million reduction to the previously-announced purchase price.

In connection with the Asset Purchase, the Fund, through its administrator PDM Royalties Limited Partnership (the "Partnership"), will amend its letter of intent with Mikes to acquire the Canadian trademarks and other intellectual property associated with Baton Rouge for $36.95 million (a $1.0 million reduction to the previously-announced purchase price) and to license the trademarks and other intellectual property associated with Baton Rouge to Mikes in consideration for a royalty equal to 6% of system sales generated by Baton Rouge restaurants (the "Transaction"). Mikes has committed to the Fund that annual minimum aggregate royalties payable to the Fund in respect of the Baton Rouge restaurants will be $4.8 million until system sales from the Baton Rouge royalty pool reach $80 million. As the number of Baton Rouge restaurants in the royalty pool is adjusted, PDC's interest in the Fund will also be adjusted pursuant to a predetermined formula. The Transaction between the Fund and PDC will be considered a related party transaction under OSC Rule 61-501 ("61-501") and Quebec Policy 27 ("Q-27"). Accordingly, a special meeting of unitholders is expected to be held in mid-December to approve the Transaction.

The Transaction is expected to be immediately accretive to PDM's distributable cash per Unit in excess of $0.20 on a basic basis, and will be neutral on a fully diluted basis. The addition of Baton Rouge is also expected to continue to lower the Fund's payout ratio, which has consistently been below 100% since the Fund's inception. Numerous other benefits are expected to be provided by the Transaction and enhance the value of the Fund and its assets over time. These benefits include geographic and operational diversification by adding a significant additional presence in Ontario and Quebec, as well as providing a highly complementary business model to PDC's existing portfolio of restaurants. This creates a similar growth platform in a segment with which PDC management already has significant experience. Management believes that the transaction will be subject to limited integration risk, while enhancing growth strategies at each of the Pizza Delight, Mikes, Scores and Baton Rouge brands.

The Fund expects to fund the acquisition of Baton Rouge trademarks and other intellectual property through a combination of convertible debentures and senior debt. A subsidiary of the Fund will amend the previously-agreed term sheet with a financial institution to provide a five year, non-amortizing $15.0 million credit facility (an increase of $5.0 million from the previously-disclosed terms) bearing interest at a rate of approximately 6.7% per annum. The debt financing is subject to a number of conditions, including preparation of satisfactory formal documentation and completion of satisfactory due diligence by the financial institution. In addition, National Bank Financial Inc. and a syndicate of underwriters have agreed to proposed amendments to the terms of the debentures offered in the previously-announced, October 17th offering, and will offer, on a marketed basis, $25.5 million principal amount of extendible convertible debentures of the Fund ("Debentures"). The Debentures will be payable semi-annually in arrears at a coupon rate of 7.75%, conversion price of $10.00 and will have an initial maturity date of January 31, 2007 and final maturity date of December 31, 2011. Completion of the offering is subject to confirmation of the previously-disclosed fairness opinion and valuation in respect of the Transaction, completion of definitive documentation, including an amended and restated prospectus and requisite regulatory approvals, including approval of the Toronto Stock Exchange.

The securities referenced by this news release have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold in the United States without registration or an applicable exemption from registration requirements. This news release does not constitute an offer to sell or the solicitation of an offer to buy securities of the Fund in any jurisdiction in which such offer, solicitation or sale would be unlawful.

About Baton Rouge

Baton Rouge is a high quality restaurant chain that specializes in rib entrees but also offers a wide variety of other offerings including steak, seafood, chicken and pasta. Baton Rouge operates in the casual dining segment with 16 full service restaurants located in Ontario and Quebec, with sites ranging from 7,000 to 9,000 square feet and seating on average 230 customers. Four new restaurants are currently under construction and are anticipated to open between October 2006 and July 2007. System sales for the year ended May 31, 2006 were approximately $75 million with same store sales growth in this period of approximately 7%. Management does not expect any reductions in staff as a result of this transaction and all key management at Baton Rouge are expected to join PDC. As a result of strong same store sales growth and the impact of the new restaurants expected to open after closing of the acquisition, Mikes has committed to the Fund that annual minimum aggregate royalties payable to the Fund in respect of the Baton Rouge restaurants will be $4.8 million until system sales from the Baton Rouge royalty pool reach $80 million.

The Fund is a limited purpose open-ended trust established under the laws of Ontario. The Fund will make monthly distributions of its available cash to holders of units. The Fund indirectly owns the trade marks and intellectual property for the Pizza Delight and Mikes Restaurants brands and has licensed them to PDC in consideration for a royalty equal to 4% of system sales generated by Pizza Delight and Mikes Restaurants. The Fund also indirectly owns the trade marks and intellectual property for Scores Rotisserie and Ribs brand and has licensed it to Mikes in consideration for a royalty equal to 6% of system sales generated by Scores Rotisseries and Ribs restaurants.

About PDC

PDC is a privately owned corporation, headquartered in Moncton, New Brunswick. It operates franchised and corporate restaurants under the brand names Pizza Delight®, Mikes® Restaurants and Scores® Rotisserie and Ribs. Pizza Delight® operates primarily in Atlantic Canada, where it dominates the family/mid-scale segment. Mikes® Restaurants operates primarily in Quebec in the casual dining segment and the take-out and delivery segments. Scores® Rotisserie and Ribs operates primarily in Quebec in the casual dining segment.